Spain

In 2011, the country’s cabinet approved a draft law to regulate all forms of remote gaming. The Spanish draft law moved forward with a tax levied on gross profits and after a controversial turnover tax was dropped. A new commission was to oversee advertising practices of unauthorized operators, prevent access from unlicensed Internet casinos, and implement fines for operators and citizens not adhering to the new gaming laws. The new gaming regulations are presented to the EC to determine their legal status within the EU.. The state monopoly, Loterías y Apuestas del Estado, is expected to be privatized to comply. The tax model approved by the Spanish Council of Ministers is not yet known.

Spain’s Minister for the Economy estimates a legalized online gambling industry could generate annual revenues of €200 million.

In 2010, the Sectorial Gaming Commission, consisting of the 17 Autonomous Regions’ (AR) gaming authorities, the State Lotteries Monopoly, and the National Gaming Board, met to discuss publishing new draft laws to regulate online gaming. The draft laws would not contain specifics on taxation. Some ARs initiated drafting local regulations. It is unclear when online gaming is considered to be crossing regional boundaries.

Despite the blurriness of regional boundaries, ARs are moving forward with their own regulations. The Government of Catalonia resolved to pass its own online gaming bill after growing tired of waiting for the central government. The bill sets minimum requirements but regulates advertising and requires companies to notify authorities in advance of their ad campaigns. The law prohibits encouraging compulsive gambling, promoting games via gifts or free drinks, and advertising to minors. Creating the Gaming Commission of Catalonia, a consultative body representing all operators, is also included in the bill. The Region of Madrid issues licenses as soon as operators meet specified requirements and has already issued licenses to existing land-based casinos and bingo halls for offering online betting, casino games, and bingo.

In May 2011, the new Gambling Law was endorsed by the Spanish Congress to establish a regulatory environment through all remote and interactive channels. The new law became effective when it was published in the State Official Bulletin (Boletín Oficial del Estado). This is Spain’s first regulation of gambling since it was decriminalized in 1977. The law allows for the establishment and development of online gambling with the exception of games exclusive to the National Lottery (LAE) and Blind Charity Lottery (ONCE). Excluded from the bill are live in-play betting and bingo, defined as having dangerously addictive effects. A one-year transition period valid until January 1, 2012 gave current operators a chance to adjust their legal status including sponsorship and advertising campaigns currently running in Spain. Online gaming licenses needed to be obtained and would be valid for an 18-month period.

On August 2, 2011, the draft eGaming law heading to the Spanish Parliament included a gross profits tax rather then the initial proposed turnover tax.

In February 2012, license applications were still being reviewed for more than 50 operators. Online gaming licenses were tol be issued for 10-year terms and renewed for another 10-year period.. Individual licenses must be obtained for each game type provided by the applicant. Licenses would be granted to companies willing to house their servers in Spain and operate via a .es domain name.

Those companies offering services to Spanish residents prior to January 1, 2012, were not sanctioned but needed to request a license in the transition period. However, infringements going forward could result in a fine of €1 million to €50 million. Gaming operators providing services to Spanish citizens will be taxed at a rate of 20 or 25 percent of all profits. Those serving Spanish customers prior to obtaining a gaming license will be required to pay retroactive taxes for up to five years. Companies will be notified of the pertinent taxes by the Tax Agency upon completing an application for the National Gaming Board. The tax is calculated per the type of gambling in question through a formula that includes the gross income received from gaming participation, net revenue, and commissions if applicable. There is also a tax in the form of an administrative fee. If a taxable event includes a license application, registration in the General Gambling Licensing Registry, and acts of the National Gambling Commission, the tax rate ranges from €20 to €10,000 or 1/1000 of the annual gross income.

The draft for Spain’s online poker regulation was expected to be in effect by the end of 2012. After a successful campaign by the Spanish online poker community, the Spanish Treasury Department (MEH) released a new draft. The changes included: raising the BB cap from 30BB to 100BB, which allows all but deep-stacked tables; the maximum big blind remains at €10, allowing full-stacked NL1000 games to run; the maximum tournament buy-in is set to €250; more poker games which permit Hold’em, Omaha, Stud, Draw Games, and possiblby Razz and other lowball games; the daily, weekly, and monthly deposit restrictions have been removed and the limits will now be decided by the National Gaming Commission (CNJ). The segregation of the international player pool stands, which stipulates that players outside Spain are welcome to play and all sites must run separate dot.es poker rooms, hosted and regulated inside the country.

On June 1, 2012, the moratorium for unlicensed operators operating in Spain was to end and the Regulación del Juego of 2011 was to take effect. All approved operators were to be moved to a .es domain. The Spanish government's home affairs and administration ministry announced that the national online gambling regulator Enrique Alejo would meet the current scheduled date of June 1, 2012 for issuing licenses to suitable applicants.

On May 21, 2012, days before the first official online gaming license was to be issued, Spain’s tax authority informed foreign gaming operators having acquired Spanish customers would need to pay two back-tax payments originating from the 1960s and 1970s. It is estimated that bwin.party owed €33 million ($42 million), Sportingbet approximately £20 million ($32 million), and 888 close to €15 million ($20 million). The first gaming licenses were scheduled to be issued in June 2012.

Spain’s online gambling market officially opened on June 5, 2012 with the launch of .es dedicated websites. Details revealed by the Spanish regulator showed 277 licenses to 53 online gaming companies. Of these, 91 were general licenses and 186 were unique licenses. Three general license and five unique license applications submitted by two companies are pending. Two license applications have been rejected. Details were not provided for the pending and rejected applications. Of the 186 unique licenses issued, 27 pertain to online poker, 26 to online bingo, 31 to online roulette, 19 to the point and bank, 28 to online blackjack, 7 to additional games, 8 to horse racing, 17 to sports betting, 4 to mutual horse racing, 1 to mutual sports betting, and 9 to others. In a departure from other national regulators, Spain has broken down online casino licenses by games; 26 licenses were issued to experienced gaming operators and 27 licenses to new market entrants. Unlicensed operators illegally participating in the Spanish market could face penalties as high as €50m.

Spain raised more than €70m by enforcing the back-tax for gaming operators weeks. The Spanish Gambling Commission initially stated that gaming operators would not be allowed to transfer player accounts to the new .es domains but changed its position and imposed a deadline of Friday, June 15, 2012 before the “transitioning rule” would go into effect.

In September 2012, ARJEL (France’s regulation body), announced it will enter into cooperation with Spains Dirección General de Ordenación del Juego (DGOJ) to share information about legalized online gambling and help with operating each other’s online poker network. Players being able to compete against each other on the networks have not yet been implemented. Preliminary discussions with Portugal and Italy are also in progress about a pooled player base among the four jurisdictions.

Spain also revised its tax code to include gambling losses against yearly wins. The new tax law is retroactively applied to 2012.

Spain’s DGOJ is consulting with licensed operators and the Spanish government to write online slot legislation with the hopes of offering slot games in 2013.

To date, Spain has generated €2.35 billion in turnover and approximately €88 million in gross revenue and expects to raise €140 million in taxes for 2012, doubling 2011 proceeds.